GlaxoSmithKline Pharmaceutical representatives not owed overtime
The Supreme Court denied pharmaceutical sales representatives the right to overtime pay in a lawsuit brought against drug manufacturer GlaxoSmithKline in a recent ruling. This decision saves the employer, and the overall pharmaceutical industries, billions of dollars that might have been owed in back pay. There are approximately 90,000 employees that hold this position across in the industry.
Pharmaceutical sales representatives were suing the company for unpaid overtime, claiming they were misclassified as outside salespeople who are usually exempt from certain rights under the Fair Labor Standards Act (FLSA). According to the suit, the representatives in question never actually made sales, so they alleged their job duties did not meet the requirements from the exemption. Instead, the representatives were required to visit doctors' offices and arrange meetings to persuade physicians to prescribe certain medications.
Employees involved in the lawsuit said they worked between 10 and 20 hours of overtime every week without receive any extra compensation for their time attendance. The FLSA requires non-exempt workers be compensated one-and-a-half times their regular pay rate if they work more than 40 hours.
Companies in other industries could be called into question regarding a payroll policy if there is any uncertainty about the correct classification for a widely-held position. To reduce liability, businesses can use a human resource outsourcing service, which may be more familiar with labor law technicalities.
Pharmaceutical sales representatives were suing the company for unpaid overtime, claiming they were misclassified as outside salespeople who are usually exempt from certain rights under the Fair Labor Standards Act (FLSA). According to the suit, the representatives in question never actually made sales, so they alleged their job duties did not meet the requirements from the exemption. Instead, the representatives were required to visit doctors' offices and arrange meetings to persuade physicians to prescribe certain medications.
Employees involved in the lawsuit said they worked between 10 and 20 hours of overtime every week without receive any extra compensation for their time attendance. The FLSA requires non-exempt workers be compensated one-and-a-half times their regular pay rate if they work more than 40 hours.
Companies in other industries could be called into question regarding a payroll policy if there is any uncertainty about the correct classification for a widely-held position. To reduce liability, businesses can use a human resource outsourcing service, which may be more familiar with labor law technicalities.
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